IFLR 1000
The Guide to the World's Leading Financial Law Firms

One of the clearest themes in the market in the last year has been the rise of covered bonds, often at the expense of securitisation structures. "There's definitely a feeling around the market that covered bonds are preferred to securitisation and that will take the rap going forward in terms of the focus on regulation," says one partner. This situation has been born out of the need to seek an alternative to securitisation during the relatively quiet market in the last couple of years and from a new class of issuer. "Covered bonds have changed quite significantly as a product, there's a new generation of investors," explains one partner. "Those guys see real value there and the products has taken to the level where issuers are willing to pay 100-150% more just to get things away." How long this trend lasts is a different issue and some see it as only a temporary change. "Securitisaton will take off and if it does well we will see a reduction in the covered bond market," says one partner.

Where business has been really brisk though is in CMBS restructuring. "The CMBS market is enormous," says one partner, "it's a market that is desperately in need of restructuring because there is so many different opportunities and CMBS is a very conflicted and difficult area." Another partner agrees: "CMBS has been flowing over, it's everywhere."

Not everyone has been getting a slice of the pie and some believe the peak of the market is yet to come: "When the dam breaks, when the maturity comes around it will have to be addressed, we thought that it would be something that people would be addressing now but it doesn't seem to be the case," says one lawyer.

RMBS meanwhile remains sluggish, though some green shoots have been seen. "There's no doubt that work in RMBS has come back in part, I'm not going to suggest at any level that we're back to where we were pre-crisis, but some work is filtering back." says one partner, while another adds: "The UK RMBS market is certainly open, there are a number of issues which have come to the market."

In the wider legal market, a lot of practitioners were keen to stress that the majority of firms and indeed their clients were attempting to broaden their horizons in terms of asset classes. There seems to be an acceptance that focusing on one product is too narrow a perspective both for companies and their legal advisors. "I think there will be a move towards more general teams rather than people having a more siloed approach where you would do just CDOs or CLOs," explains one partner. "Investors are looking at a slightly different product from what they had historically. The market is now trying to take a holistic approach to products as opposed to having a US product, a European product and an Asian product. Firms will have to adapt."

Allen & Overy maintains its position in the top tier of the structured finance and securitisation table this year based on the wider strength of its team in these areas and its market leading derivatives practice.

"Excellent, very strong, leaders in their field. Extremely competent and suggest solutions. Extremely knowledgeable of the business area, very up to date with the regulatory environment," says one client and another agrees, again highlighting the firm's regulatory knowledge: "Very good law firm. Consistently gave strong advice on transactions, they are the cutting edge on regulatory development."

A key pillar of the firm's work this year has been the mandates emerging from the re-emerging CLO and structured products markets. Both Tony Drake-Brockman and Daniel Shurman have been extremely active, with the former advising Deutsche Bank on its Global Investor Solutions I collateralised issue in Italy. Shurman meanwhile advised Credit Suisse, Morgan Stanley and Barclays in regard to structured equity linked deposits covered by FSCS protection. He also advised Barclays Capital on the structuring of structured Ucits (Undertakings for Collective Investment in Transferable Securities) funds.

Both partners have also acted alongside David Wainer and Andrew Sulston on a variety of secured and unsecured note programmes for the like of Nomura, Macquarie and VTB Capital.

The firm's network also impressed clients: "Italy, Amsterdam, Paris, all a similar standard to London," says one, though they add that "communications between London and Milan could have been better".

On the securitisation side, the team led by Salim Nathoo has strengthened its US law capacity on both sides of the Atlantic with the addition of asset-backed securities specialist Hank Michael in London and the arrival of Ed de Sear in New York.

Nathoo is held in high regard by clients: "One of the best securitisation lawyers in the London market, he has in-depth knowledge of securitisation issues which extends across a number of asset classes," says one client, "He understands the fundamentals of typical securitisation structures and the ability to look at new regulatory issues. He has an immediate knowledge and the ability to foresee what is needed for our business."

Nathoo was active last year advising Nationwide on a £1.5 billion RMBS issue into the US market. Issued through the Silverstone master trust programme, the issue was the first ever by a UK building society into the States.

One of the firm's largest transactions in the resurgent CMBS market saw Christian Lambie acting for Goldman Sachs and HSBC as lead arrangers on Tesco Property Finance's third credit tenant-linked CMBS-style financing valued at £958 million. This was followed by further advice on the fourth programme this time for £685 million advising JPMorgan in addition to Goldman and HSBC. The deals draw their value from the strength from the solid payment stream of the underlying leases.

The team hammered home its advantage in the market last year acting on a number of firsts. In one example Tim Conduit advised Andromedia on the first Italian project bond. In a growing area of the market, the deal won IFLR magazine's European award for Securitisation and Structured Finance Deal of the Year 2011 for the transaction which saw a dual issue of €97.6 million in Class A1 and A2 Notes due in 2028. The deal was also the first time the Italian export credit agency SACE had backed a public renewables bond for a project. The deal structure saw loans granted to Andromedia PV being transferred to Andromedia Finance utilising Italy's securitisation law.

Conduit was gain involved acting for Bank of New Zealand's first covered bond programme and an initial issuance under that of NZ$175 million (£82.5 million) of five year bonds and NZ$250 million of seven year bonds. The team also advised the bank on the programme's listings on the Luxembourg stock exchange.

Completing a treble of notable transactions Conduit also advised Citi as the bookrunner, Citigroup Trustee Company as the trustee and Japan Bank for International Cooperation as guarantor on a securitisation of revolving auto loans, the first ever done in the UAE.

Clifford Chance is still considered one of the leading practices in this area, with the ability to draw on its wider capital markets and finance experience: "Highly knowledgeable on regulatory and technical issues covering securitisation and they have ongoing market expertise," says one client.

RMBS has been slowly returning to the market in the last year and the Clifford Chance team has taken full advantage. In September 2010, Kevin Ingram and up and coming partner Emma Matebalavu advised RBS as originator and Arran Residential Mortgages Funding as issuer of a £4.7 billion RMBS transaction. This was RBS's first foray back into the UK RMBS market since the crash.

Matebalavu also acted for Bank of Scotland as seller, Lloyds TSB as arranger and Headingly RMBS as issuer of a £1.17 billion RMBS. Lead partner Peter Voisey meanwhile acted for JPMorgan Securities as arranger and joint lead manager of the Co-operative Bank's first RMBS issuance of £2.5 billion of triple-A rated notes, Silk Road Finance Number One. The deal was born out of the Co-ops acquisition of Britannia with the latter's mortgage portfolio being used as collateral.

Although the firm is often praised for its capacity, a number of clients mentioned that the firm had developed a habit of over utilising its large teams: "We weren't happy with Clifford Chance and still aren't," says one. "They overlawyered everything, they just kept things going on for months, creating problems that weren't there just so they could solve them."

On the securitisation side a key highlight saw Prashanth Satyadeva advise Hertz Europe on a securitisation of its vehicle fleets in France and the Netherlands as part of its wider refinancing. The issue of funding notes by International Fleet Financing was used to repay existing bonds under the group's initial pan-European vehicle fleet securitisation. The firm are hopeful of seeing more securitisation transactions in this manner from sub-investment grade corporates.

Another highlight saw Steve Curtis advise Wales & West Utilities over the establishment of a £5 billion whole business securitisation bond. This involved two issues of 'flipper' bonds, which migrate into the securitisation programme.

In other areas, the team acted for HBOS on the transfer of a credit card receivables from Lloyds to Bank of Scotland under the Penarth credit card master trust programme and teams from London, Frankfurt, Luxembourg, Milan and Paris combined to advise Crédit Agricole as arranger and Banca IMI as manager of an auto-loan portfolio refinancing for FGA Bank German, Fiat's German auto finance arm.

Securitisation remains the firm's main pillar of strength in the structured products area and this was no better demonstrated than the firm's work last year on the development of two new products: the rather unfortunately titled Asbo (accelerated structured bond offering) and the Utility HoldCo (bond securitisation product). With liquidity still proving difficult to come by and the rise of the bond markets to fill the gap, the Asbo could prove a useful tool, allowing as it does the borrower to effectively bypass the need for short term bank financing (later to be refinanced through a bond issue) and instead leap straight to the capital markets.

The first time this new tool was used, the firm advised a huge consortium of banks including HSBC, RBS and Société Générale as the lenders and joint lead managers on the £700 million issue of Asbo bonds as part of the wider acquisition finance package granted to the a consortium for its purchase of HSBC Asset Finance's train leasing business. Julian David advised on the securitisation aspects alongside the firm's projects team.

Davies was also the lead partner as the team acted for Anglian Water Services, Osprey Acquisitions and Anglian Water (Osprey) on its £475 million refinancing including both bank and bond debt. The bond was graded as a HoldCo which falls between sovereign and high-yield debt and the deal marked the first time such a structure had been used on a water company securitisation.

As in derivatives, there are still those in the market who see the firm as being both aided and abetted by its continuing role on numerous Lehman related matters: "Linklaters I think are so so focused and heavily involved in the Lehman fallout and everything related there to that they simply don't have the capacity to do anything else on structured matters," says one peer. Certainly Lehman related work remains a key factor of the firm's work, but a look at the firm's mandates in the last year suggests that the practice has been engaged on a wide variety of other matters as well.

Clients liked the fact that the firm could draw on a wide network, but specifically that there was a centralised command structure: "It was one of the reasons we picked them, we didn't have to deal with the non-UK guys on a day to day basis. It was good, it reflected the value system of the firm," says one client, "We never had that situation where you have to wait for the Italian office or the Spanish office."

Compared to some of its closest rivals the team was also praised for its fee levels: "I personally spend about £20-30 million in fees a year and they by far proved to be the best value," says one busy client.

The last year has seen a resurgence in the covered bond market and the firm can also point to some notable mandates in this area. In one, a team led by partner Andrew Vickery advised Barclays, BarCap, Bank of America/Merril Lynch, Deutsch Bank Securities, Morgan Stanley and DnB NOR Bank as the dealers on DnB NOR Boligkreditt's $8 billion covered bond programme and initial $2 billion issuance into the US market.

In a similar deal Andrew Vickery acted for RBS on a €15 billion global covered bond programme. The issuance is backed by RBS and Natwest's UK mortgage portfolio.

RMBS is another asset class which has been steadily returning and Anne Hoe acted for the banks including RBS as arranger and joint lead manager and JPMorgan Securities, Lloyds TSB and RBS securities as joint lead managers of a £4.5 billion RMBS issuance of residential mortgages by RBS and NatWest Home Loans.

Although CLOs have not been a particularly vibrant asset class since the financial crisis, last year Hoe advised on a novel new structure for Lloyds TSB and Bank of Scotland. The deal consisted of a £1.6 billion securitisation of UK PFI (private finance initiative) loans. This is the first deal of its type with the portfolio including loans to projects such as schools, police stations and hospitals throughout the UK.

There are mixed opinions about Freshfield's strategy in the structured finance and securitisation market. "They have always had a few practitioners in these areas but it's never been a main focus for them," says one peer.

In the capital markets space, equity remains the king at the firm and in recent years the firm's straight debt and high-yield practices have also risen to prominence. However progress has also been made in the structured area and under the guidance of lead partner Simeon Rudin the firm continues to move forward. "I think Freshfields have done very well in taking advantage of the restructuring cycle. They are involved on stuff which historically they would never have been involved on," says another peer.

One example of this increasing status is the firm's role advising HSBC Rail on its bank and bond restructuring and refinancing of its UK rail business in advance of the sale to a consortium of infrastructure funds including 3i Infrastructure, Morgan Stanley Infrastructure Partners and Star Capital Partners.

Clients suggested that where the firm's steals a slight march on the firms above it is its dedication to providing commercial advice above all else. One client of Rudin says: "They are driven by the commercial nature of deal, assisting and forging new grounds," another adds: "Excellent. Used to complicated financing and managing the process. Commercial backed up with a very thorough analysis." Finally another says: "They have an ability to suggest alternative ways of achieving a commercial outcome."

A major securitisation deal saw Ian Falconer acting for Citi, Barclays, JPMorgan, Bank of America/Merrill Lynch and Deutsche Bank on a €450 million syndicated trade receivables securitisation by oil company LyondellBasell.

Partner Chris Barratt also had a busy year acting on various deals in the resurgent RMBS area, advising Northern Rock on a £2 billion securitisation.

Ashurst's reputation in this area is built on its strength in the CDO and CLO space. This had caused a slight drop off in work in recent years as both markets experienced problems. "Ashurst were a volume CDO shop, that's all they ever did and that's gone," says one partner.

However, in line with many other firms in the market, there has been a concerted effort made to diversify the practice and this is now bearing fruit.

Another major change in the practice has been the departure of Erica Handling, the former group head who moved to Barclays Capital. Her replacement Chris Georgiou has big shoes to fill, but will be hoping to move the firm to a more rounded base.

CDO and CLO work is still a key pillar of the practice and though work has reduced, there are still a few mandates to be had. In one example, David Quirolo advised Barclays Capital as the swap counterpart on over 30 CDO transactions. In another he acted alongside Michael Smith acting for Intermediate Capital Managers as manager on the CLO by ICG EOS Loan Funding.

The last year has been fairly tumultuous for the Sidley Austin structured finance and securitisation team with three partners Dennis Dillon (Hogan Lovells), Rob Torch and Jonathan Edge leaving the firm and another, Michael Durrer, moving to the firm's New York office. In response, John McGrath was made up to partner with Bryce Peterson being promoted to counsel. This upheaval was noted by peers: "Sidley definitely exited the market," says one practitioner and another agrees: "Sidley have lost a significant number of their practitioners."

Despite this the firm was still mandated on some notable transactions including advice to Whitehall, RREEF, Capita and Deutsche Trustee over a €3.5 billion debt restructuring including €1.13 billion in CMBS notes.

Another highlight saw a team led by Partha Pal and Mike Durrer acting for the joint lead managers including Standard Chartered and BNP Paribas and the issuer Korea Housing Finance Corporation (KHFC) on the issue of $500 million in covered bonds.

Another deal which saw the team acting for the banks saw the firm advising Banc of America Securities, Deutsche Bank and its securities arm, Merrill Lynch and UBS as the lead managers on three separate issuances under the Nationwide RMBS Silverstone programme.

The well respected Sanjev Warna-kula-suriya took over the running of the Slaughter and May's structured finance and securitisation department this year following the retirement of partner Christopher Smith who had previously led the team.

Although most in the market were complimentary about the practice, as in some other areas there is a perception that the team is largely providing a support function for clients from other parts of the firm. "Slaughter's have a fine practice but they just act for their corporate clients, they're not a market leading securitisation firm, they are a service firm," says one rival partner.

One client, which has kept the team busy is Santander. In one deal, the team acted for the bank on two RMBS transactions by Langton Securities (2010-1) and (2010-2), one valued at £2.2 billion and a second valued at £6 billion denominated in Stirling, Dollar and Euros. The team also advised on a further issue worth £13 billion. The team also acted for the bank on another RMBS issue, this time the restructuring of a programme by Holmes Master Issuer, which included a voluntary repurchase of £36 billion of loans by Santander. Following the restructuring, an issue of £2.9 billion was made under the RMBS programme.

On another deal for the bank, the team advised on a number of issuances under its €25 billion covered bond programme. These included issues of €4.6 billion £1.5 billion and NKr1.6 billion (£176 million) and the firm provided further advise to allow for the issuance of German N bonds.

There was a fair amount of movement at White & Case last year, with David Barwise moving to Singapore, Josh Parbhu moving to Johannesburg and Rich Reilly relocating from New York to London.

The team was also enhanced by the promotion to partner of Jeremy Trinder who focuses on CMBS and RMBS transactions. Trinder has already taken steps to establish his name and last year he advised Investec and Barclays Capital as the arrangers on the RMS 25 RMBS transaction. The firm had previously acted for Kensington Mortgages before it were acquired by Investec.

Before departing for Singapore, Barwise was also kept busy advising rating agency Standard & Poor's on the Tesco Property Finance 3 and 4, securitisations of various stores and distribution stores.

The two key figures in Simmons & Simmons for structured finance and securitisation work are practice head Ian Sideris and Simon Schiff. Derivatives partner David Roylance also does work in this area.

The team has a focus on securitisation work and Schiff in particular was kept busy in this area last year. In one example he acted for Singer Asset Finance on a £260 million equipment lease receivables securitisation. He was also called in by Lloyds TSB to act on a $4 billion RMBS restructuring.

The Spanish real estate sector has, due to it being badly hit in the downturn, thrown up a lot of restructuring work in the last couple of years. Simmons conversely found itself advising on one of the few new transactions out there, acting for Caja de Ahorros del Mediterraneo on four separate securitisations of Spanish mortgage loans and real estate.

In a derivative linked deal, Roylance acted for UBS as the arranger of a synthetic securitisation of a €1.5 billion portfolio of derivatives.

The London team of Cadwalader Wickersham & Taft is relatively small compared to some of its US peers and a lot of the work undertaken by the firm are deals born out of New York led transactions with an English law aspect.

The firm has been involved in a number of catastrophe (cat) bonds in the last year including providing advise to Aon Benfield Securities as the underwriter of a €75 million issue by French reinsurer SCOR. The bonds are designed to provide protection against earthquakes and windstorm events.

The Herbert Smith team has worked on a handful of notable transactions in the last year, which suggests that the department may be starting to gain traction. In the five partner team, Michael Poulton and practice head Jake Jackaman remain the key figures and both were involved in the team's key work last year.

One highlight saw Poulton advising Barclays Capital as the arranger on a £5.7 billion securitisation for Bank of Ireland (UK). This involved the formation of a special purpose vehicle (Bowbell No. 1) which issued bonds, the proceeds of which would be used to purchase various residential mortgages.

Poulton was also involved as the team acted for the bond steering committee on the restructuring of the Fleet Street Finance Two CMBS transaction. The deal involved the restructuring of €2 billion of senior debt secured on a large portfolio of German property. This was the first CMBS restructuring that includes and extension of the maturity of the notes.

Clients were also very pleased with Poulton's service: "One of the reasons why service has been so strong is because Michael was previously a banker in a role the client is currently in," says one client. "He is commercial, he is able to see from the bankers perspective." The client continues: "Michael and team are a high quality alternative to the magic circle firms we may otherwise work with. His prior knowledge of the banking side of things is outstanding. We would like to work with them again in the future."

Another client points to a more straightforward attribute possessed by Poulson: "One of the things I like about Michael is he always picks up his own phone."

One of the firm's largest deals last year, which drew in teams from a number of different departments was the sale of High Speed 1, the operator of the Channel Tunnel. Jackaman was involved acting for London & Continental Railways on the whole business securitisation stapled finance.

Led by David Hudd, the four-partner team at Hogan Lovells in London was enhanced last year through the hire of Dennis Dillon from Sidley Austin.

Securitisation mandates were high on the agenda last year and one of the firm's largest deals saw them advise long standing client FCE Bank (the European finance entity of the Ford Motor Company). The deal saw a team jointly led out of London and Paris acting for the bank on a £1.3 billion Globaldrive securitisations consisting of consumer loans, consumer leases and trade receivables.

Julian Craughan led the London team on the FCE deal and was involved as the firm acted for Tube Lines Finance on amendments to its £1.2 billion whole business securitisation. The deal, which was a restructuring of one of the UK's first project securitisations also involved a termination of a monoline wrap (Insurance company guarantee), a rare occurrence in the UK.

One firm who worked with James Doyle highlighted his ability to adapt to circumstance: "Exceptionally knowledgeable in business area. We had some very complex transactions but the team led by James were very knowledgeable. One was the first transaction of its kind and threw up a lot of problems; it did not affect James at all. James has a sixth sense, very much on the ball."

In other areas the team also acted for the UK's export credit agency the Export Credits Guarantee Department (ECGD) over the issue of two sets of notes to repackage the credit risk of three aircraft leases. The leases were in regard to Airbus A330-300 aircraft delivered to Aercap.

It was one in one out at Mayer Brown last year with partner Elana Hahn moving to Morrison & Foerster in September 2011, while Stuart McAlpine joined the team from Orrick in April 2011.

Last year the firm acted on an issue of notes backed by Norwegian retail auto loans. The team also acted for the joint receivers of Golden Key on a structured investment vehicle restructuring.

Client were particularly impressed with Bruce Bloomingdale: "We worked with him on two deals, very complicated transactions but he has the technical ability to make people understand clearly what is going on," says one. "He understands our business, there are two lawyers in that field we rely on and Bruce is one of those two." Another agrees: "When dealing with new asset class he managed to guide us through, he led it very well."